Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 2, Problem 2.10BE
To determine
To match: The enhancing characteristics with its definition.
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Students have asked these similar questions
Under Qualitative Characteristics of Useful Financial Information, the abilitythrough consensus of measures to ensure that information represents what itpurports to represent is an example of the concept of:a. Relevanceb. Verifiabilityc. Faithful representationd. Feedback value
Match the qualitative characteristics below with the following statements.
1. Timeliness
2. Completeness
3. Free from error
4. Understandability
5. Faithful representation
6. Relevance
7. Neutrality
8. Confirmatory value
a. Quality of information that assures users that information represents the economic phenomena that it purports to represent.
b. Information about an economic phenomenon that corrects past or present expectations based on previous evaluations.
c. The extent to which information is accurate in representing the economic substance of a transaction.
d. Includes all the information that is necessary for a faithful representation of the economic phenomena that it purports to represent.
e. Quality of information that allows users to comprehend its meaning.
Qualitative Characteristics
The following is a list of qualitative characteristics of useful accounting information identified in the FASB's and the IASB's Statement of Financial Accounting Concepts No. 8 and statements describing the qualities.
A. Comparability
B. Decision usefulness
C. Relevance
D. Faithful representation
E. Predictive value
F. Confirmatory value
G. Verifiability
H. Neutrality
I. Free from error
J. Consistency
K. Materiality
L. Timeliness
M. Understandability
N. Completeness
Required:
Select the appropriate letter identifying each quality on the statement describing the quality.
1.
Different knowledgeable and independent observers can reach consensus that a particular representation is faithful.
2.
Making information available to decision makers before it loses its capacity to influence decisions.
3.
Capacity to make a difference in a decision, enabling users to predict future outcomes and/or confirm prior expectations.
4.
Overall objective of…
Chapter 2 Solutions
Intermediate Accounting
Ch. 2 - Prob. 2.1QCh. 2 - Prob. 2.2QCh. 2 - Why is a conceptual framework of accounting...Ch. 2 - Prob. 2.4QCh. 2 - Prob. 2.5QCh. 2 - Prob. 2.6QCh. 2 - Prob. 2.7QCh. 2 - When is financial information considered...Ch. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - What is the recognition principle and when is an...Ch. 2 - What is the revenue recognition principle and when...Ch. 2 - Prob. 2.14QCh. 2 - When are expenses recognized under IFRS?Ch. 2 - How are transactions recorded under accrual...Ch. 2 - Prob. 2.17QCh. 2 - Prob. 2.1BECh. 2 - Objective of Financial Reporting. Explain the...Ch. 2 - Prob. 2.3BECh. 2 - Fundamental and Enhancing Characteristics....Ch. 2 - Prob. 2.5BECh. 2 - Prob. 2.6BECh. 2 - Prob. 2.7BECh. 2 - Fundamental and Enhancing Characteristics....Ch. 2 - Faithful Representation. Match the component of a...Ch. 2 - Prob. 2.10BECh. 2 - Prob. 2.11BECh. 2 - Capital Maintenance Adjustments, IFRS. Describe...Ch. 2 - Expense Recognition. Discuss the three main...Ch. 2 - Element Definitions. Identify whether the...Ch. 2 - Prob. 2.15BECh. 2 - Element Definitions, U.S. GAAP, IFRS. Identify...Ch. 2 - Prob. 2.17BECh. 2 - Measurement Bases. Match the measurement basis...Ch. 2 - Cash versus Accrual Bases of Accounting. The...Ch. 2 - Assumptions in Financial Reporting. Indicate the...Ch. 2 - Conceptual Framework. Noeleen Auto Mall, Ltd....Ch. 2 - Qualitative Characteristics. Referring to the...Ch. 2 - Prob. 2.3ECh. 2 - Cash versus Accrual Bases of Accounting. Top Notch...
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Similar questions
- Which of the following is not true? A. Organizations share a common purpose or mission. B. Organizations have inflows and outflows of resources. C. Organizations add value to society. D. Organizations need accounting information.arrow_forwardHow can the enhancing characteristic understandability be improved in high-quality accounting information? Do not simply repeat what it is, provide suggestions as to how a particular part of the enhancing characteristic could be improved. Please provide different answers and explanations than copy and pasting: “Information that is understandable to the average user of financial statements is highly desirable.”arrow_forwardThe qualitative characteristics that make accounting information useful for decision-making purposes are as follows. Relevance Neutrality Verifiability Faithful representation Completeness Understandability Predictive value Timeliness Comparability Confirmatory value Materiality Free from error Instructions Identify the appropriate qualitative characteristic(s) to be used given the information provided below. a. Qualitative characteristic being employed when companies in the same industry are using the same accounting principles. b. Quality of information that confirms users’ earlier expectations. c. Imperative for providing comparisons of a company from period to period. d. Ignores the economic consequences of a standard or rule. e. Requires a high degree of consensus among individuals on a given measurement. f. Predictive value is an ingredient of this fundamental quality of information. g. Four qualitative characteristics that are…arrow_forward
- Select the best answer for each of the follwing items and give reasons for your choice. a. Which of the following best describes the relationship between assurance services and attest services? (1) While attest services involved financial data, assurance services involve nonfinancial data (2) While attest services require objectivity, assurance services do not require objectivity (3) All attest services require independence. (4) Attest and assurance services are different terms referring to the same types of servicesarrow_forwardPROBLEM Below is a list of the qualitative characteristics identified in FASB Statement of Financial Accounting Concepts No. 2. Following the list is a series of descriptive phrases. a. feedback value b. relevance c. decision usefulness d. reliability e. comparability f. predictive value g. varifiability h. consistency i. representational faithfulness j. timeliness k. neutrality _____ 4. When information is verifiable and neutral. _____ 5. Occurs when the measurement results can be duplicated. _____ 6. The overall qualitative characteristics accounting information should possess. _____ 7. When information enables decision makers to confirm prior expectations. _____ 8. When accounting information is reported the same way by different companies. Required: Match each characteristic with the appropiate phrase.arrow_forwardexplain the roles of integratedreporting in the following aspects:a. Providing information that is relevant to stakeholders;b. Comparability of reporting.c. Quality of reporting; andd. Usefulness of reporting;arrow_forward
- “A key component of the Accounting Conceptual Framework (ACF) is the qualitative characteristics of useful financial information that includes relevance, faithful representation, and other enhancing qualities for identifying and disclosing financial information.” Requirements: By reviewing IFRS 16, critically evaluate how accounting regulators and practitioners reflect the qualitative characteristics in practice. Your analysis may also highlight any advantages and challenges in respect of applying the qualitative characteristics in any context(s). Your answer must clearly mention the IFRS(s) chosen and support your critical evaluation by drawing on evidence and arguments from credible, verifiable, and accessible sources e.g., peer-reviewed academic journals, professional publication, books etc.arrow_forward“A key component of the Accounting Conceptual Framework (ACF) is the qualitative characteristics of useful financial information that includes relevance, faithful representation, and other enhancing qualities for identifying and disclosing financial information.” Requirements: By reviewing IFRS 15 and/or IFRS 16, critically evaluate how accounting regulators and practitioners reflect the qualitative characteristics in practice. Your analysis may also highlight any advantages and challenges in respect of applying the qualitative characteristics in any context(s). Your answer must clearly mention the IFRS(s) chosen and support your critical evaluation by drawing on evidence and arguments from credible, verifiable, and accessible sources e.g., peer-reviewed academic journals, professional publication, books etc.arrow_forwardPerformance Principle. Identify how each of the following statements relates to the performance principle by considering which element(s) of the principle are related to that statement. (A statement may be related to more than one element.) Use the following elements inproviding your response:∙ Reasonable assurance∙ Planning and supervision∙ Materiality∙ Risk assessment∙ Audit evidencea. Evaluating the effectiveness of the client’s internal control in preventing or detectingmisstatements.b. Obtaining an understanding of the client’s business and industry.c. Acknowledging that the risk of failing to detect a material misstatement cannot bereduced to zero.d. Obtaining confirmations from the client’s customers as to the ending balances inaccounts receivable.e. Preparing a written audit plan.f. Designing audit procedures to identify misstatements that would have a significanteffect on financial statement users’ decisions.g. Considering the likelihood that the account balance contains a…arrow_forward
- Management accounting considers these factors more important than others.a. verifiability, objectivity and accuracyb. relevance, flexibility and timelinessc. consistency and disclosured, authenticity and reliabilityarrow_forwardWhich among the following are the reasons why regulation of the accounting profession is essential? i. Regulations address the knowledge imbalance between the provider and purchaser of professional service. ii. Regulations ensure that accounting services are of the right quality. iii. Regulations ensure that the cost benefits to these third parties are taken into account. a. i and ii b. i, ii, and iii c. i and iii d. ii and iiiarrow_forward“A key component of the Accounting Conceptual Framework (ACF) is the qualitative characteristics of useful financial information that includes relevance, faithful representation, and other enhancing qualities for identifying and disclosing financial information.” Requirements: By reviewing IFRS 16, critically evaluate how accounting regulators and practitioners reflect the qualitative characteristics in practice. Your analysis may also highlight any advantages and challenges in respect of applying the qualitative characteristics in any context(s). Your answer must clearly mention the IFRS 16 and support your critical evaluation by drawing on evidence and arguments from credible, verifiable, and accessible sources e.g., peer-reviewed academic journals, professional publication, books etc.arrow_forward
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